U.S. Dollar Climbs Ahead Of U.S. Data

The U.S. dollar strengthened against its key counterparts in European deals on Thursday, as traders await the release of U.S. economic data later in day, with trading being thin ahead of the New Year holiday.

The Labor Department is scheduled to release its jobless claims report for the week ended December 26th at 8:30 am ET. Economists expect claims to have increased to 270,000 from 267,000 in the previous week.

MNI Indicators is set to release the results of its Chicago business barometer survey for December at 9:45 am ET. The consensus estimate calls for an increase in the business barometer to 50 from 48.7 in November.

Meanwhile, trading volumes were thin, with traders still away for the New Year holiday.

The European markets are trading in red, further bolstering the appeal of the safe-haven dollar.

The dollar has gained 4.90 percent against the pound, 9.65 percent against the euro and 0.51 percent against the yen for 2015, as the Fed started its tightening cycle with a December hike.

The greenback showed mixed performance in the Asian session. While the currency held steady against the yen and the euro, it climbed against the franc. Against the pound, it declined.

The greenback appreciated to 1.0888 against the euro, its highest since December 23. This is up by 0.39 percent from Wednesday’s closing value of 1.0931. The next possible resistance for the greenback may be located around the 1.07 region.

The eurocoin indicator, which measures the current economic situation in the euro area, increased notably in December to the highest level in four-and-a-half years, the Bank of Italy and the Centre for Economic Policy Research said in a survey report.

The eurocoin indicator rose to 0.45 in December from 0.37 in the previous month. The latest reading was the highest level since July 2011.

The greenback, having fallen to a 2-day low of 120.33 against the yen at 4:30 am ET, recovered slightly with the pair trading at 120.43. At Wednesday’s close, the pair was worth 120.50.

Reversing from an early low of 1.4844 against the pound, the greenback bounced off to 1.4808. Further uptrend may see the greenback challenging resistance around the 1.47 region.

Data from the Bank of England showed that Britons’ housing equity injections decreased to the lowest level in almost six years in the third quarter.

Households injected GBP 8.82 billion in the third quarter compared to GBP 12.17 billion in the previous three months. This was the lowest since the fourth quarter of 2009, when it totaled GBP 8.1 billion.

The greenback advanced to a 2-day high of 0.9943 against the Swiss franc, compared to 0.9886 hit late New York Wednesday. On the upside, 1.00 is possibly seen as the next resistance level for the greenback.

The greenback, having fallen to 0.6867 against the kiwi at 3:15 am ET, reversed direction with the pair trading at 0.6838. The greenback is likely to find resistance near the 0.675 zone.

The material has been provided by InstaForex Company – www.instaforex.com